Seven in 10 consumers plan on using convenience store delivery services more in the future, however over half admit that they are unaware of its availability to them, according to the new HIM & MCA Insight UK On Demand Convenience Market Report 2020.
Currently, 54% of consumers have never heard of delivery from a convenience store through an app and 59% have never heard of delivery directly from a convenience store. However, nearly half of consumers would use convenience store delivery, despite never trying it.
Seventy per cent of consumers who already use convenience store delivery plan on using it more often in the future, with just 6% planning on using it less. Among current non-users, 46% say they will start using convenience store delivery services in the future, highlighting the opportunity to widen the active consumer base.
The three biggest barriers to consumers using on-demand convenience are product cost, delivery fees and wanting to walk to store.
Consumers expect to pay a 33% premium when using convenience delivery vs supermarket in-store. Exclusive promotions to the delivery channel will help boost price perception. Retailers could also implement a loyalty system whereby consumers can unlock discounts the more they use the service.
As well as improving the price perception of the service, there is also an opportunity to drive increased spend through premiumisation, with 27% saying that convenience store deliveries would replace takeaway delivery at least sometimes. The report indicates that there is opportunity for higher price point items such as premium bake-at-home pizza which can replicate the experience of foodservice delivery.
Blonnie Walsh, head of Insight at HIM & MCA Insight said: “On demand convenience opens up a great opportunity for retailers to capitalise on the recent surge in demand for online grocery delivery services – a trend that is forecast to continue once lockdown ends. However, despite high demand for these services, awareness remains low, with over half of consumers unaware that convenience store delivery exists.”
“In order to maximise footfall and awareness, promotion of the service needs to focus on the key benefits that distinguish it from other forms of grocery delivery ie fast delivery and smaller minimum spend. However, as well as driving awareness, it is critical that retailers get the balance of their offering right. There are clear thresholds when it comes to product cost and delivery time/fee that, if not implemented correctly, will deter consumers from using the service.”